' JAVED IQBAL, J.---This appeal with leave of the Court is directed against the judgment dated 13-4- 2004 passed by learned Division Bench of the High Court of Balochistan, Quetta, whereby the appeal preferred under section 196 of the Customs Act, 1969 on behalf of the Collector Customs, Central Excise & Sales- Tax (appellant) has been dismissed.
2. Leave to appeal was granted by this Court vide order dated 19-11-2004 which is reproduced herein below to appreciate the legal and factual aspects of the controversy:- "This petition has been filed against the judgment dated 13th April 2004, passed by High Court of Balochistan Quetta.
(2) Precisely stating facts of the case are that the respondents imported pista and chickpeas but allegedly made certain misdeclaration in respect of the quantity of the imported items, subsequently when it surfaced allegedly certain documents were tampered and duty and taxes were paid in the bank, later on however the goods were seized and the adjudicating authority vide order dated 5th April 2003 confiscated the entire consignment in addition to imposing 300% penalty upon the importer and Custom Staff was also penalized who was in league with the importer for the commission of such illegal acts. Accordingly the importer being dissatisfied preferred appeal before the Customs Excise and Sales Tax Appellate Tribunal and succeeded in getting relief vide judgment pronounced by it on 11th June, 2003. Against the said judgment petitioner preferred appeal under section 196 of the Customs Act, 1969 but without any success as the same has been dismissed vide impugned judgment.
(3) Learned counsel appearing for petitioner contended that the learned Division Bench of the High Court failed to appreciate that the question involved was not as to whether the pista and chickpeas have been smuggled into Pakistan; but the question was as to whether mis-declaration has been made by the importer in terms of section 32 of the Customs Act, 1969 for which overwhelming documentary evidence was available on record but without making reference to the same this important question of law has been decided. According to him in such-like situation the imported items were liable to be forfeited outrightly, instead of giving option to the importer for the release of some on payment of the duty etc.
(4) Learned counsel appearing for the caveat vehemently opposed the contentions of the learned counsel and stated that the High Court had taken into consideration the implications of section 32 of the Customs Act and maintained the judgment of the Appellate Tribunal in view of the fact that the duty had already been paid on the quantity which was imported as the Government has not suffered any loss in any manner. He further stated that the scope of the appeal under section 196 is limited only to the extent of question of law; whereas in the instant case question of fact was being raised which the High Court was not bound to examine. He further stated that the appeal was not competent as it was filed by the Assistant Collector (Law) who was not authorized in this behalf according to law, therefore, learned High Court rightly dismissed the petition filed by Customs Department.
(5) After having heard the learned counsel for both the sides and examining the record, we are inclined to grant leave to appeal to examine their respective contentions.
Pending decision of the appeal arising out the petition, operation of the impugned judgment is suspended; however office is directed to fix the appeal within a period of three months, as imported goods are presently lying in custody of Customs Department."
3. Mr. W.N. Kohli, learned Advocate Supreme Court entered appearance on behalf of the appellant and argued vehemently that learned, Division Bench has misconstrued and misinterpreted the provisions .As enumerated in sections 32 and 156(1)(14) of the Customs Act, 1969 which resulted in serious miscarriage of justice. It is further argued that learned High Court has failed to dilate upon the pivotal issue qua false and fraudulent declaration entailing penal consequences on the basis of Notification S.R.O. 374(1)/2002 dated 15-6-2002 which was neither relevant nor applicable to the controversy in hand. It is also contended that the wrong and incorrect assumption of facts by the Customs and Sales Tax Tribunal and adjudication thereof squarely falls within the provisions of section 196 of the Customs Act, 1969 which aspect of the matter went unnoticed by the learned High Court. It is also contended that learned High Court erred while holding that no point of law was involved in the appeal as the questions raised in the memo. Of appeal were never adverted to nor decided. Mr. W. N. Kohli, learned Advocate Supreme Court has supported the order of learned Additional Collector Customs being well based who alone was competent to decide the dispute involving factual controversy.
4. Mr. Tariq Mahmood, learned Advocate Supreme Court appeared on behalf of respondents and supported the judgment impugned for the reasons enumerated therein with further submission that the order passed by learned Additional Collector Customs was laconic, non-speaking and has rightly been set aside by the learned High Court. It is also contended that it was not a case of tax evasion or fraud but a case of misdeclaration simpliciter made unintentionally and at the best it could be termed as a "bona fide mistake" or "an inadvertent omission". It is urged with vehemence that the respondents should have been given an option to get the consignment released pursuant to the provisions as enumerated in sections 32 and 181 of the Customs Act, 1969 read with SRO No,374(I)/2002 dated 15-6-2002.
5. We have carefully examined the respective contentions as agitated on behalf of appellant and for the respondents, scanned the entire record and perused the judgment impugned. Let we mention here at the outset that the provisions as contained in sections 32 and 181 of the Customs Act, 1969 would not be applicable in this case which is a classic example of forgery and fraud committed by the appellant knowingly and deliberately for the evasion of customs duty.. It must be noted that it is not a case of any partial misdeclaration or of carrying the excess quantity of dutiable goods but it is a case of fraud, forgery and tampering the documents i,e, Bill of Entry/invoices. It is worth mentioning that learned High Court in its appellate jurisdiction cannot transgress certain limits by giving relief which could not have been granted under the relevant provisions of Customs Act, 1969. In our view, option to make payment of fine in lieu of confiscation would certainly encourage such like fraud and unscrupulous entrepreneurs. The Customs Authorities have proved and established that the fraud practised upon them was intentional and deliberate as fake and forged invoices were prepared and thus, by no stretch of imagination, such a forgery can be equated with that of a "bona fide mistake" or "an inadvertent omission". We are conscious of the fact that in the application of laws which may culminate in the imposition of these enormous penalties, the authorities in question should act with complete fairness and the utmost circumspection if their actions are not to have effects detrimental to the Maintenance and development of trade and to the wider interests of the public, and the country," (Eastern Rice Syndicate 'v. Central Board of Revenue PLD 1959 SC (Pak) 364) but it must not be lost sight of that such a naked fraud must be checked with strictness so that such menace qua evasion of customs duties should be eliminated. It is not necessary that option must be given to the delinquents who are responsible for forgery and fraud to get such consignment released in lieu of confiscation as it would not be in consonance with the provisions as contained in sections 32 and 181 of the Customs Act, 1969, as pressed time and again by Mr. Tariq Mahmood learned Advocate Supreme Court D on behalf of respondents. It transpired from the scrutiny of record that it was not a case of misdeclaration simpliciter or bona fide mistake but on the contrary it was a case of tampering, fraud, forgery, duplication/counterfeiting of relevant documents and therefore, the respondent was not entitled to get any relief in view of his fraudulent conduct. It hardly needs any elaboration that section 32 of the Customs Act, 1969 - initially deals with the case where by reasons of any inadvertence, error or misconstruction, any duty or tax has not been levied or has been short- levied or has been erroneously refunded and cannot be made applicable where some fraud has been committed knowingly, intentionally and deliberately.
6. We are not persuaded to agree with Mr. Tariq Mahmood, learned Advocate Supreme Court on the behalf of respondents that the order passed by learned Additional Collector Customs is laconic and non-speaking for the reasons that every aspect of the controversy has been dilated upon and decided in a comprehensive manner by giving cogent reasoning, relevant portion whereof is reproduced herein below to show that all the contentions agitated before learned Additional Collector Customs were examined and decided elaborately and comprehensively:-- "15. Record of the case has been very carefully examined and the arguments pub-forth by all the defendants, whether in writing or verbally had been duly considered. It is observed that the reporting Collectorate had made out this case on a specific information hence the Collectorate had kept all the events closely under surveillance on 7-1-2003. The importer had ordered a mixed consignment of (i) PISTA With Shell of PCT heading 0802.5000 dutiable at 25% ad val and chargeable to sales tax at 15% of the duty paid value and (ii) Chickpeas of PCT heading 0713.2000 which is exempt from the whole of customs duty and sales tax. Ab initio, the very act of importing a MIXED CONSIGNMENT of dutiable and duty-free goods, although not prohibited under the law, raises suspicion in any common mind as chances of evasion through misdeclaration in such a case logically exist in abundance. Even otherwise this modus operandi is of common knowledge which can be acquired from any person engaged in import, clearance assessment, transportation, sale or purchase of such items and goods specifically in the backdrop of a practice in vogue for years together in the past. Nevertheless, the facts on record are that the importer through his clearing agent had filed a Bill of Entry on 7-1-2003 declaring thereon the quantity of imported goods as (i) Pista with shell 123 bags (49 kg. Each) and (ii) Chickpeas 317 bags (49 kg. Each).
Interestingly, this Bill of Entry was neither properly machine-numbered, as it was essentially required to be under the law, nor its all other copies where available/entered/ maintained in the customs record at NLC Dry Port. The goods were however, physically removed on issuance of a Release Order of the same date signed by Ex-D.S. Mr. Ahmed Ali, stating therein particulars of goods as "440 bags, Channa/Pista with shell" without even stating the quantities of each item separately. This Release order also verified and embodied the fact of payment of duties and other taxes and deposit there of in the Bank, accompanied with this crucial document together with an office copy of Bill of Entry, which was neither machine numbered nor properly entered in the relevant record of the customs at NLC Dry Port, but only Stamped (so very unusual as not otherwise required), the goods departed on the vehicle in the same container. Colonel Babar, the NLC Incharge (separately heard and examined, as well) who was already informed and entrusted to keep a watch on this specific consequential was vigilant, hence on its arrival at the exit gate he informed the Collector who in turn promptly dispatched Mr. Waheed Marwat, the Assistant Collector Headquarters to rush to the scene and physically examine the consignment and the record pertaining thereto. It would not be out of place to mention here that this specific information was consciously kept secret from the Customs Staff responsible for assessment because of the fact that their connivance and being in league with the importer and clearing agent was also a part of the said information. Having de-stuffed the container and examined the goods fully, the quantities were physically found as under:- ' 400 bags Pista ' 40 bags Chickpeas 440 bags total ' At this point of time, the goods found different from the one declared as under: ' 123 bags Pista ' 317 bags Chickpeas 440 bags Total ' Having found this fact, which was quite in accordance with the information available with the Collectorate, the importer, Clearing Agent and the Customs Staff joined hands in defending their already committed act of misdeclaration by:
(i) denying the very existence of stamped Bill of Entry containing the description of Pista 123 bags and Chickpeas 317 bags, which was deliberately not entered in the customs record and
(ii) having prepared in the time period of about one hour which the Assistant Collector was bound to take in the physical examination and accountal of goods, another set of Bill of Entry, duly Machine Numbered describing the goods thereon as 320 bags Pista and 120 bags Chickpeas was produced by the Customs Staff. Sadly, this document, though prepared post facto, was still not able to fully cover the goods found on actual examination i,e, 400 Pista and 40 Chickpeas.
' On this, scrutiny of evidence of payment of duty/taxes was undertaken to find the fact as to whether which of the Bill of Entry was actually filed, assessed and entered in the record. This revealed that duty/taxes against both of these Bills of Entry were deposited through the following separate Treasury Challans which were also verified by the bank:
(a) Rs,1,30,767 deposited vide Treasury Challans dated 7-1-2003 which were deposited as per the stamped Bill of Entry befor'e apprehension of the consignment as corresponding with the quantity/description of goods given therein; and ' Rs,3,00,049 deposited vide T.C. Nos.43 and 44 dated 7-1-2003, corresponding with the quantity/description of goods as on Machine Numbered Bill of Entry, which the clearing agent, the importer and the Customs Staff came out to own jointly: ' The Assistant Collector then perused the customs record at NLC Dry Port and found that the Register of Bills of Entry did mention Bills of Entry No,3249 dated 7-1-2003 with Rs,3,00,049 as duty/taxes paid on a quantity of 320 Pista bags and 120 Chickpeas bags.
' Having heard, all present on 18-3-2003, examined and allowed cross-examination of the case reporting officers, the following is revealed:
(i) Two Bills Entry were existing until the goods were caught;
(ii) duty/taxes with identical number on each of the two Bills of entry were paid twice and separately on two occasions i,e, one before removal. Of goods and then after apprehension and imposition of the act of misdeclaration;
(iii) the Ex-Deputy Superintendent had signed and issued the Release Order in such a vague manner as to state only the cumulative quantity of 440 bags of Chickpeas/Pista. Had there been a bonafide clearance and removal of goods a seasoned and experienced officer cannot club the duty-free and dutiable goods together. Although he had denied to have signed this Release Order before 'me but his confession on committal of this act is evident on record in the disciplinary proceedings before the Collector, where he had conceded this very act;
(iv) the clearing agent had no course in the face of such a blatant act having been unexpectedly approached is found to be the primary/lead person responsible to have engineered the whole game. He had, undeniably deposited the duty/taxes twice and it was not the NLC Incharge or anybody else who had done so; and
(v) had the consignment "safely" left the NLC premises, the machine numbered Bill of Entry would have formed part of the record and the accompanying "stamped" Bill of entry destroyed so as to cover the act of misdeclaration aimed squarely at evading duty/taxs on dutiable Pista recovered in the garb of duty-free Chickpeas. Even the quaintly of goods-which was not entered in the record until apprehension-would have been entered to 'cover-up' "the act once all was signaled as "Clear", post facto."
7 . We have also examined carefully the provision as contained in SRO No,374(I)/2002 dated 15-6- 2002 which cannot be made applicable in view of the chequered history of the case and naked fraud committed by the appellant as it mainly deals with a different situation and no where it has been mentioned that in case of forgery and fraud, option will be given to pay fine in lieu of confiscation for such consignments which were brought by playing fraud upon the Customs Authorities which has been proved and established to the hilt. As mentioned herein above in view of the fraud as committed by the respondent for the evasion of customs duty the question of any option under the garb of S.R.O. No,374(I)/2002 dated 15-6-2002 does not arise.
8. The upshot of the above mentioned discussion is that the appeal is accepted. The judgment dated 11-6-2003 passed by the Customs, Excise & Sales Tax Appellate Tribunal, Karachi and the judgment passed by learned High Court of Balochistan, Quetta, dated 13-4-2004 are hereby set aside. The order, dated 5-4-2003 passed by learned Additional Collector Customs being well based does not warrant interference and shall remain intact.
' These are the reasons of short order dated 10-2-2005 which reads as follows: "For the reasons to be recorded later on, the appeal is allowed and impugned judgment of High Court is set aside. The order dated 5-4-2003 of Additional Collector Customs, Quetta is restored."